'Mid-term polls will spoil India's growth'
An Assocham survey says 68 per cent of Indian CEOs express fear over the growing political uncertainty.business Updated: Aug 26, 2007 14:04 IST
With the stand-off over the Indo-US civil nuclear deal throwing up the possibility of mid-term elections, corporate India is jittery that it would have an adverse impact on the country's economic growth.
In a survey conducted by the Associated Chambers of Commerce and Industry (Assocham), 68 per cent of Indian CEOs have expressed fear and apprehension over the growing political uncertainty.
"Political happenings have an important bearing on the health of an economy. The ongoing turmoil would halt the growth momentum," said Venugopal Dhoot, Assocham president.
Of the 235 top level chief executives who participated in the survey, a whopping 90 per cent were of the opinion that the Indo-US nuclear deal would augur well for the country and that mid-term elections would jeopardise several plans and policies in the pipeline initiated by the government.
Infrastructure projects would get delayed, including ultra-mega power projects, modernisation of airports, rural electricity, Rajiv Gandhi Vidyutikaran Yojana, Bharat Nirman and the Delhi-Mumbai Industrial Corridor Project.
Economic measures such as aligning the indirect tax structure of the economy under a single system of Goods and Service Tax (GST) by the financial year 2010 as envisaged by the government is necessary for sustaining the country's growth.
The proposal by the finance ministry to introduce the new income tax code that will simplify and replace the 50-year-old law by 2008 would be necessary for the economy to rise.
As many as 86 per cent of the respondents feel these measures are essential for the economy and it is important that the government is allowed to run peacefully.
"Apprehensions about the government's stability would not only affect the economic activity at the domestic level but international trade would also be hampered," Assocham said.
India has now made an important position for itself and for the developing countries at the World Trade Organisation, and political uncertainty would hurt the country's understanding with its international trading partners, 70 per cent corporate leaders feel.
The Indian industry is also against spending a huge amount of money on conducting elections, which would cost the exchequer more than Rs 27 billion. As many as 93 per cent of the CEOs were of the opinion that the amount spent on conducting mid-term elections would be a total waste and serve no purpose.